Can a free zone company conduct business on the mainland?

Overview:

The United Arab Emirates (UAE) is famous for its exemplary economy and business climate. There are many options available for entrepreneurs to set up their ventures in the UAE. The UAE commercial arena can be divided into three economic zones: mainland, free zone, and offshore.

In this blog, we’re going to break down the UAE mainland and free zone company structure and answer several frequently asked questions about the status of a free zone company regarding the possibility of carrying out activities on the mainland.

Mainland Company in the UAE:

The mainland companies in the UAE are businesses operating onshore, and they are governed by state laws. An entrepreneur can establish a mainland business as an LLC with up to 50 shareholders or as a sole proprietorship, depending on factors such as business type, liability, ownership, and registration. Licenses and registrations for businesses operating in mainland are issued by the Department of Economic Development (DED) within the respective emirate, thus freely blending with the local economy. This allows companies to operate within the UAE mainland for strategic benefits which accrue from the strong economic infrastructure.

Free Zone Company in the UAE:

On the other hand, free zone companies are offered tax exemptions, full foreign ownership, and unrestricted profit repatriation. The zones are strategically located near major logistics hubs, allowing efficient business operations and global connectivity. With nearly 45 specialized free zones across the UAE, entrepreneurs can take advantage of business-friendly environments tailored to various industries.

Curious if free zone company conduct business on the mainland? Let’s discuss the possibilities.

Can a Free Zone Company Conduct Business on the Mainland?

Free zone companies operate according to specific regulations of the local government in each emirate. All free zones, including the RAK Free Zone, have its own rules and limitations.

In general, a free zone business cannot carry out its operations directly on the mainland. However, if a free zone company intends to expand its business activities on the mainland, it needs to get permission from the relevant free zone authority first. Then, the company will have to complete the licensing procedure with the DED in the emirate in which it wants to operate.

Arnifi – As Your Trusted Partner

Arnifi simplifies business setup, whether for holding companies or subsidiaries, by taking care of licensing, documentation, and regulatory compliance. Our expert team takes care of smooth visa processing, effective accounting and tax services, and continuous post-establishment support. Whether you opt for a free zone, mainland, or offshore setup, we assist you in navigating legal and tax obligations with ease. Concentrate on business expansion while Arnifi takes care of the rest.

Also Read: Requirements for Establishing a Holding Company in Dubai